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Drought response in an election year: Evidence from Brazil

Author

Listed:
  • Claudio R. Lucinda
  • David Grover, Sejal Patel

Abstract

Research on the impact of water conservation instruments rarely considers the role of electoral politics. This paper evaluates the response of a major state-owned water utility to the drought that occurred in the city of São Paulo, Brazil during 2014. The response coincided with an election for state governor. A difference-in-difference research design produces no evidence that a reward-based instrument implemented before the election reduced household consumption. Evidence is found that a penalty-based instrument implemented after the election reduced consumption by 4 to 8%. The implications of insulating water utilities’ drought response from the political-electoral cycle are discussed.

Suggested Citation

  • Claudio R. Lucinda & David Grover, Sejal Patel, 2019. "Drought response in an election year: Evidence from Brazil," Working Papers, Department of Economics 2019_09, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2019wpecon09
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    File URL: http://www.repec.eae.fea.usp.br/documentos/Lucinda_Grover_Patel_09WP.pdf
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    More about this item

    Keywords

    Water conservation; policy instrument design; political budget cycles; drought;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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